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The company behind the popular online video game Fortnite is suing Apple in Australia for allegedly abusing its market power by taking a portion of all revenue earned from apps on iPhones, iPads, and Macs.
Fortnite is a huge money maker for Epic, with millions of daily users logging in billions of hours in the game each month. It is expected to generate revenues of US $ 5 billion in 2020.
However, Epic Games has long complained about Google and Apple’s policies of taking between 15% and 30% of all transactions made through apps on iOS and Android devices.
Fortnite launched on both the Apple App Store and the Google Play Store in August after Epic bypassed the companies’ in-app payment methods for its own cheaper direct billing that prevented Apple and Google from taking a part.
Since then, Epic has filed legal action in the US, while facing a possible one-year ban from Apple’s App Store, and on Monday, Epic Games launched a case against Apple in Australia.
In documents filed in federal court, Epic Games alleges that through Apple’s control over in-app purchases and its actions to ban the Fortnite app, Apple has abused its market power and is substantially diminishing competition in the applications development.
“Apple’s conduct has forced Epic and other app developers to pay Apple’s monopoly prices [the 30% commission] in relation to all in-app purchases of your in-app content on iOS devices, ”the document states.
“This has resulted in damage, including increased prices for in-app content by iOS device users in Australia and lost profits for Epic.”
Epic Games stated that if Apple allowed developers to distribute their iOS apps outside of the App Store, or make payment methods outside of Apple’s payment method, it would improve competition.
Epic CEO Tim Sweeney said in a statement that Apple was stifling competition by limiting in-app purchases.
“This is much bigger than Epic versus Apple – it goes to the heart of whether consumers and creators can do business together directly on mobile platforms or if they are forced to use monopoly channels against their wishes and interests,” he said.
In a FAQ posted alongside the announcement, Epic said that it had not yet started proceedings against Google. The company also noted that other companies such as Amazon, DoorDash, and McDonald’s were allowed to have their own direct payment methods in apps, but Apple had restricted it for games and for Epic.
“The addition of our own payment system allows us to offer players options while distributing savings, just like other applications can. This option provides a more level playing field in mobile device stores while saving gamers money, which Apple should agree is a good thing for everyone. “
In a statement, an Apple spokeswoman pointed to comments by a US judge on a ruling against Epic seeking a preliminary injunction in October, describing Epic’s failure to pay as “misleading and clandestine.” The spokeswoman said Epic’s actions were expressly about violating App Store guidelines designed to protect customers.
“Their reckless behavior turned clients into pawns, and we hope to make this clear to the Australian courts,” he said.
The case will be the first test of misuse of market power when it comes to Apple’s App Store in Australia, and a major test of section 46 of the Competition and Consumers Act, which was added in 2017 after a recommendation. by Ian Harper. led the review of Australia’s competition laws in 2015, Australian Competition and Consumers Commission Chairman Rod Sims told Guardian Australia.
“It is possibly the most significant evidence of [section] 46, we have had to date, ”he said. “So, from our point of view, it’s a really important case.
“We are very pleased that this is being tested in our jurisdiction.”
Sims said the case will focus on what defines the market: whether it is located anywhere a game can be purchased or is limited to the market within the App Store itself.
“Apple is clearly going to argue that the market is the games market, and it is very broad. Epic is going to argue that the market is based on how things are paid in Apple’s App Store.
“So that’s exactly what to discuss.”
The case will inform the ACCC’s review of the market power of Apple and Google app stores announced in September as part of its long-running investigation into digital platforms.
